Southern California -- this just in

Former Villaraigosa aide opposes tax, says budget woes overstated

February 11, 2013 | 8:19
am

One of Los Angeles Mayor Antonio Villaraigosa's former high-level budget advisors
said Sunday that city officials are using "fuzzy math" to overstate the size of the budget
shortfall, even as they press voters
to pass a sales-tax hike in the March 5 election.

Matt Szabo, who served until last summer as Villaraigosa's deputy chief of staff, said a new financial report indicates that the budget shortfall for the upcoming year is less than
half the $216 million figure that has been used repeatedly by budget officials in recent months.

City Administrative Officer Miguel Santana, the top budget official, warned in a report last week that a defeat of Proposition A could lead to cuts in park hours, police staffing and other services. But Szabo said Santana's own report states that pension
costs for
the upcoming year will be $45 million lower than expected and that at least $70 million more may be available to erase the shortfall.

"If we're making an argument that failure to pass a tax increase will
result in drastic cuts, then the numbers the city uses had better be
accurate. And I don't think they are," Szabo said. "The question people need to ask is, is [the shortfall] being overstated for the purpose of passing the sales tax?"

Szabo, one of 12 people running to replace Councilman Eric Garcetti, handled budget issues for Villaraigosa before resigning last
summer. He made his remarks a day before the mayor was slated to appear at a news conference endorsing the tax.

Santana said he kept his projection for the shortfall at $216 million because he does not yet know how
much expenses will rise in the coming fiscal year, which starts July 1. Even with the additional money cited by Szabo, the city will still have a gap, he said in an email.

"The sales tax proposal is not just about eliminating the threat of further cuts over the next 12 to 48 months, but about making major progress toward the long-term fiscal health of the city," Santana said.

If passed, Proposition A
would generate roughly $215 million per year and leave Los
Angeles with one of the highest tax rates in
the state. While some union and business leaders have endorsed the measure, it has been criticized by several candidates running for City Council.

Szabo said Proposition A would deliver a "sucker
punch" to low-income communities," especially if
L.A.'s elected officials move ahead with efforts to cut or eliminate the gross receipts tax on businesses. "You do the math," he said. "We’re going to take from one group and give to the
other."